A cautiously positioned portfolio with a strong momentum and income focus

Report created on Nov 24, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is characterized by a significant allocation to momentum stocks through the Invesco S&P 500® Momentum ETF, making up half of the portfolio, alongside a balanced mix of fixed income and growth opportunities via the American Century ETF Trust and Janus Henderson AAA CLO ETF. The division between stocks (75%) and bonds (25%) suggests a cautious approach, aiming to balance growth with income generation and risk mitigation. The overall composition aligns with the portfolio's moderate diversification and risk classification, indicating a strategy that seeks to capture market upswings while providing some buffer against downturns.

Growth Info

The historical performance of this portfolio, with a Compound Annual Growth Rate (CAGR) of 22.18% and a maximum drawdown of -15.49%, showcases its ability to generate significant returns while maintaining a relatively moderate risk profile. The concentration on momentum stocks has likely contributed to these returns, capitalizing on trends within the S&P 500. However, the days contributing to 90% of returns being concentrated in just 24 days highlights the portfolio's reliance on short, significant market movements, which may not be sustainable long-term.

Projection Info

Monte Carlo simulations, projecting a wide range of potential outcomes based on historical data, suggest a strong likelihood of positive future returns, with all simulations yielding gains. The median projection of a 1,202.1% return is notably optimistic, yet investors should remember that such simulations assume past trends will continue, which may not always be the case. This method helps in understanding potential volatility and return outcomes but cannot predict unforeseen market shifts.

Asset classes Info

  • Stocks
    75%
  • Bonds
    25%

The portfolio's asset class allocation, with a 75% weighting in stocks and 25% in bonds, indicates a balanced approach towards growth and income. This mix supports a moderately cautious risk posture, leveraging the growth potential of equities while using bonds to reduce overall volatility. The absence of alternative investments or significant cash holdings suggests a focused strategy on active market participation rather than hedging or liquidity management.

Sectors Info

  • Technology
    21%
  • Financials
    15%
  • Industrials
    9%
  • Telecommunications
    9%
  • Consumer Discretionary
    6%
  • Consumer Staples
    4%
  • Energy
    3%
  • Health Care
    2%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    1%

The sectoral distribution within this portfolio, with a strong emphasis on technology and financial services, reflects a tilt towards industries that can offer robust growth opportunities. However, this concentration also introduces sector-specific risks, particularly in volatile market conditions or during economic downturns. The relatively lower allocations to defensive sectors like healthcare and utilities may limit the portfolio's resilience in bear markets.

Regions Info

  • North America
    66%
  • Europe Developed
    3%
  • Japan
    2%
  • Asia Emerging
    1%
  • Asia Developed
    1%
  • Australasia
    1%

Geographically, the portfolio is heavily weighted towards North America (66%), with minimal exposure to international markets. This focus enhances the portfolio's potential to capitalize on the growth of the US economy but also increases its vulnerability to regional economic and political risks. The limited diversification across global markets may restrict opportunities to benefit from international growth trends and currency fluctuations.

Market capitalization Info

  • Large-cap
    26%
  • Mega-cap
    25%
  • Mid-cap
    15%
  • Small-cap
    5%
  • Micro-cap
    2%

The allocation across different market capitalizations, with a preference for big and mega-cap companies, underscores the portfolio's conservative stance, relying on the stability and lower volatility typically associated with large, established firms. However, the modest allocation to medium, small, and micro-cap stocks suggests an opportunity to enhance returns through increased exposure to high-growth potential segments of the market, albeit with higher risk.

Risk vs. return

This chart shows the Efficient Frontier, calculated using your current assets with different allocation combinations. It highlights the best balance between risk and return based on historical data. "Efficient" portfolios maximize returns for a given risk or minimize risk for a given return. Portfolios below the curve are less efficient. This is informational and not a recommendation to buy or sell any assets.

Click on the colored dots to explore allocations.

The portfolio's current risk-return profile suggests there is room for optimization. Moving towards a more efficient portfolio, as indicated by the Efficient Frontier analysis, could potentially increase expected returns to 7.03% without assuming additional risk. This optimization suggests reallocating assets to achieve a better balance between risk and return, potentially through diversifying more broadly across sectors, geographies, and asset classes.

Dividends Info

  • American Century ETF Trust 2.10%
  • Janus Detroit Street Trust - Janus Henderson AAA CLO ETF 5.50%
  • Invesco S&P 500® Momentum ETF 0.70%
  • Weighted yield (per year) 2.25%

The dividend yields across the ETFs, averaging 2.25%, contribute to the portfolio's income generation, complementing capital gains with a steady income stream. The higher yield from the Janus Henderson AAA CLO ETF is particularly notable, offering a robust income component. This focus on dividends supports the portfolio's cautious profile, providing cash flow which can be reinvested or used as income.

Ongoing product costs Info

  • American Century ETF Trust 0.26%
  • Janus Detroit Street Trust - Janus Henderson AAA CLO ETF 0.21%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Weighted costs total (per year) 0.18%

The Total Expense Ratios (TERs) for the ETFs in this portfolio average to 0.18%, which is relatively low, supporting better net returns over the long term. Keeping costs low is crucial for enhancing investment efficiency, especially in a cautious strategy where excess fees can significantly erode the modest returns typically associated with lower-risk investments.

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